ELECTRICITY, EXERGY AND ECONOMIC GROWTH IN MOZAMBIQUE, 1971 – 2014

Teles Huo and Miguel Aubyn (mstaubyn@iseg.ulisboa.pt)

No 2021/0170, Working Papers REM from ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa

Abstract: The article analyses the relationship between electricity consumption, useful exergy (UEx) and economic growth in Mozambique, from 1971 to 2014. UEx data for Mozambique was constructed following the methodology of Miller, et al. (2016): first, the conversion of final electricity consumption (FEC) into its exergy equivalent; second, the association of the exergy data with exergy categories, based on useful uses; and third, the determination of UEx applying efficiencies corresponding to each category of use. Efficiency scores to be applied depend strongly from local conditions, both in terms of the average annual ambient temperature (especially for heat production efficiencies), and in the industrial dynamics and standards (for mechanical work). The FEC data are expressed in GWh, obtained from the International Energy Agency database (IEA), which includes for Mozambique (until the date of writing) data covering the period from 1971 to 2014. Unrestricted VAR models were estimated which allow other types of effects to be captured. This option is particularly important for an economy like that of Mozambique, which underwent different phases and restructuring processes during the period under study. Results show that, in the period under analysis, there was a huge increase in FEC, from 2000 and 2001, as the effect of the start-up of the aluminium smelter company, Mozal. Despite the growth trend of UEx in the trade and services sector, total UEx continued to be strongly dominated by the UEx of the industry sector. The greatest contribution to total UEx came from the mechanical work of the industry sector, followed by the production of heat at high temperatures. UEx growth accelerated in 2000 and 2001 with the entry of the Mozal aluminium company, due to the importance of heat production at high temperatures. Our FEC model shows that economic growth in Mozambique has not been influenced by the increase in electricity consumption. However, the growth of the economy induces FEC growth. The UEx model indicates that there is no relationship between UEx and economic growth. The growth of the economy does not influence the UEx, unlike the result from FEC model.

Keywords: economic growth, electricity consumption, energy; exergy; Mozambique, useful exergy (search for similar items in EconPapers)
JEL-codes: C32 O13 O47 Q43 (search for similar items in EconPapers)
Date: 2021-04
New Economics Papers: this item is included in nep-ene
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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